Forfeiture of lease
Commercial landlords have two options, should their tenant breach the terms of their lease due to non-payment of rent.
Mixed use premises
They can obtain an order for possession or use the common law remedy of forfeiture. If there are residential premises attached to the commercial premises, for example a flat upstairs that shares a communal entrance, then the landlord must go to court to obtain an order for possession.
However, for the majority of landlords, forfeiture will be the more attractive option, as it does not require going to court and can be undertaken very quickly once the time period specified in the lease has elapsed. This is commonly 21 days.
Forfeiture entails the peaceful re-entry to the unoccupied property by a certificated enforcement agent, normally assisted by a locksmith. If the certificated enforcement agent believes there may be a possible breach of the peace during the forfeiture, he will arrange for police support.
Once they have secured access to the premises, the locks will be changed and the tenants’, and any sub-tenants’, rights to the property will end.
Notice does not need to be given to the tenants when forfeiting the lease due to non-payment of rent. This will include any items reserved as rent under the terms of the lease such as service charges.
If there are any other breaches to the lease, the landlord must give notice to the tenant to allow them time to remedy the breach. Once remedied, the landlord may not then forfeit the lease.
If the landlord demands or accepts rent payments, or exercises his right to recover rent arrears under CRAR (commercial rent arrears recovery), this will waive his right to forfeit the lease.
The landlord will only regain the right to forfeit if the tenant goes into arrears on a subsequent occasion.
Relief from forfeiture
The tenant and sub-tenant does have the right to apply for relief. This should be done “without delay”, normally within 6 months. If their application is successful, the tenancy will be restored.
Forfeiture during administration
There is a moratorium on legal action, including enforcement, when a business is in administration. The landlord will need permission from the administrator or the court to forfeit the lease during this time.
Find out more
All our enforcement agents are certificated and we are regularly instructed by landlords to forfeit commercial leases.
If you would like to find out more about the forfeiture of a lease, please get in touch on 01792 450031.